Can third party wound care providers bill Medicare Part B for wound supplies for hospice patients? This is a question that has come up frequently in the last year. Many of our hospice clients have been approached (repeatedly and aggressively) by wound care organizations who offer free wound supplies for hospice patients, free unlimited consultation with wound nurses and direct delivery of these supplies to the patient’s residence at no charge to the hospice.
Does this sound too good to be true? It sure does! There is a reason for that. These organizations are billing the charges for these services to Medicare under Part B. While they argue vehemently that they can do this, and they can in certain limited instances, it is our opinion that this will eventually come back and bite these companies and the participating hospices back. Most commonly, these wound companies’ main defense is that the wounds are unrelated to the terminal illness and therefore can be billed as such. This concept should give you pause for concern.
Final Rule 202 and Bundled Payment
The 2020 final rule brought with it a change in the verbiage required for the hospice Election of Benefit form, as well as a change in perspective. How does this apply? Simply, the new EOB requires the wording: “I understand that items, services, and drugs unrelated to my terminal illness and related conditions are exceptional and unusual, and in general, the hospice will be providing virtually all of my care while I am under a hospice election.” Exceptional and unusual. This verbiage brought with it clarity and a change in how hospices should be determining coverage and medical relatedness. While the consent does go on to state that unrelated items, services and drugs will continue to be billable to Medicare under separate benefits, the idea that wounds are unrelated should be explored in greater detail.
We all know that the hospice benefit payment is essentially a “bundled payment.” In its simplest definition, a bundled payment refers to the situation in which “providers receive a single payment for a set of services related to a patient’s care, rather than being paid for each individual treatment. The goal of bundled payments is to improve the quality and coordination of care while reducing costs.” Hospices receive a single (per diem) amount and that should be all inclusive for anything related to the terminal diagnosis and related conditions.
The idea of relatedness and unbundling was brought to the forefront of the industry with the 2019 OIG report (A-06-17-08004) that investigated and raised concerns about medications that should have been covered by hospices, but were billed to Part D. Many states have conducted medication audits and recouped hundreds of thousands of dollars from hospices for drugs that were billed to Medicaid rather than to the hospice.
Wounds, Relatedness and Terminality
One of the greatest concerns about unrelating wounds from the terminal diagnosis is that patients in the last six months of their life will have a reduced ability to heal, therefore, wounds will almost always be related to the terminal condition. If the wound is clearly unrelated to the terminal diagnosis, it is still a symptom/sign that impacts terminality and prognosis. Hospice Support Specialists encourages our clients to answer this simple question: If you received an ADR for this patient, would you use the presence of the wound to support medical eligibility? Does the wound show up in your COTI? Is it indicated on the LCD as supporting terminal status? If you answered “yes” to any of those questions, then you need to consider how the wound could be unrelated.
“If you received an ADR for this patient, would you use the presence of the wound to support medical eligibility?”
Who is making the determination of relatedness? One client that we worked with was taught to refer every patient with skin breakdown to the wound care company’s specialists who then made the determination of relatedness. Upon speaking with the company representatives, they had no clear understanding of the holistic and comprehensive nature (and Medicare’s expectation) of hospice. They simply looked at a single terminal diagnosis and unrelated wounds, made recommendations, sent supplies and billed Medicare. As the professional managers of the entire plan of care, abdicating responsibility for determination of payment is risky and irresponsible. As hospice experts we cannot allow others to dictate how we provide care and what we cover (we could go on endlessly about levels of care in facilities and how this same concept hurts all hospices…).
Medicare Covered Wound Care
Medicare does cover wound care. This is most often seen as a skilled home health service. The LCD for wound care coverage (L37166) clearly states that “Medicare coverage for wound care on a continuing basis for a given wound in a given patient is contingent upon evidence documented in the patient’s medical record that the wound is improving in response to the wound care being provided.” This lends itself to the question, would a truly appropriate hospice patient have healing wounds? As a general rule, when we see wound healing, it is indicative of adequate nutritional status, vascular sufficiency, absence of pressure, and in general a health status that is unlikely in a terminally ill patient whose prognosis is six months or less. If the patient’s wound is healing, the next question to be considered is whether this patient is truly hospice eligible or were they perhaps admitted too early? Let’s not even mention how healing wounds are represented on any claim review, ADR or otherwise.
And Then There’s the Whole Problem of Incentivizing for Referral…and HIPAA
As if the related nature of the majority of wounds, the concerns regarding unbundling and dual billing Medicare for the same service are not enough to cause worry, there is a whole incentivizing for referral issue. This is not the usual “hospice inducing patient referrals for admission” problem but is actually that the hospice is receiving remuneration for providing referrals! If hospices are supposed to cover the cost of wound care services and supplies, and the wound care company offers all of these things at no cost for simply referring patients to them, does that not equal inducement on the part of the wound care organization? Whether the company providing these services is well intended or not, the receiving hospice remains complicit and will ultimately be responsible for any wrongdoing or at least involved in any fraudulent claims.
An additional area worth consideration is the requirement that hospice nurses send photos and information on all patients with identified wounds to the third-party provider. Unless the hospice has clearly defined that the patient’s wound is not related to their hospice, this could be a HIPAA violation, depending on the services being offered by the vendor and the rationale for sending that information.
Why Should We Care About Any of This?
Unrelating wound care, medications or any other medically reasonable and necessary service places your hospice at financial risk. As with the focus on pharmacy, whenever we try to save money in a questionable manner, we are not only hurting ourselves, but the hospice payment system as a whole. This will eventually come to the attention of Medicare and will result in yet another investigation.
Hospice News brought this concern to our attending back in August of 2022 in their article “Medicare Claims for Unrelated Services Put Hospices at Risk” yet this increase in third party companies targeting hospices has grown significantly. Ignorance is not an excuse. As Hospice News reported over two years ago, “The vast majority of the time, the hospice is not the organization billing for services outside of the benefit, but these practices and the regulatory response impacts them nevertheless.” This trend is driving much legislation and consideration for hospice payment reform. How our industry responds will continue to drive how Medicare responds.
Our Recommendation:
How can you address this issue? Can you reasonably use these wound care organizations without risk? The answer isn’t easy, but it can be simple. If the wound is truly unrelated to the terminal diagnosis and related conditions (a very rare, “exceptional and unusual” situation) and is reasonable and medically necessary wound care provided by a third party is reasonable provided that the following questions are answered with a clear “yes”:
- Is the hospice determining and managing the plan of care?
- Is the intervention being provided in line with hospice philosophy?
If your hospice is using a third party wound care provider we recommend that you determine how they are getting paid, who is determining whether the wounds are related, what patient information are you offering to these vendors (providing medical information about all patients could potentially be a HIPAA violation), who is managing the plan of care. If you identify that the wound is related to terminal illness, you must ensure that you are covering the cost of these services out of your per diem. If you cannot do this with total certainty, you may want to consider discontinuing these services through the vendor.
Unfortunately, we are seeing more and more clients being aggressively pursued by wound care vendors who are providing some misleading information. Make sure your team understands your responsibility when it comes to relatedness and coverage under the hospice Medicare benefit. If you are uncertain, engage a qualified consultant with expertise in the industry and a clear understanding of how to reduce your risk.
Disclaimer: this is a professional opinion based on historical OIG activity, experience and understanding of the Medicare Hospice Benefit.
